EXHIBIT 99.(2)(k)(v)
COLLATERAL SECURITIES ACCOUNT AGREEMENT
COLLATERAL SECURITIES ACCOUNT AGREEMENT
AGREEMENT, dated as of October 1, 2004, among BOULDER GROWTH & INCOME FUND,
INC. ("Borrower"), a corporation organized under the laws of Maryland and
registered as an investment company under the Investment Company Act of 1940
(the "1940 Act"), CUSTODIAL TRUST COMPANY, a bank organized under the laws of
the State of New Jersey ("Lender"), and INVESTORS BANK & TRUST COMPANY, a
Massachusetts trust company ("Securities Intermediary").
WHEREAS, Borrower wishes to borrow funds from Lender for the purpose of
purchasing and otherwise dealing in securities in its business as an investment
company registered under the 1940 Act, and to pledge securities and other assets
as collateral for such borrowings pursuant to a Loan and Pledge Agreement, dated
as of February 21, 2003, between Lender and Borrower (the "Loan and Pledge
Agreement");
WHEREAS, such securities and other assets belonging to Borrower are held in
custody with Securities Intermediary pursuant to a Custodian Agreement, dated as
of September 29, 2004, between Borrower and Securities Intermediary (the
"Custody Agreement");
WHEREAS, to facilitate Borrower's pledge pursuant to the Loan and Pledge
Agreement of such securities and other assets, and to perfect Lender's security
interest therein, Borrower and Lender desire that all such securities and other
assets as may from time to time be pledged to Lender be credited to and held in
a segregated account established with Securities Intermediary to which only
securities and other assets of Borrower are credited;
WHEREAS, Borrower and Lender desire to retain and employ Securities
Intermediary to act, and Securities Intermediary is willing to act, as
securities intermediary as provided herein with respect to the securities and
other assets of Borrower that are pledged to Lender;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, capitalized terms used
herein that are defined in the New York Uniform Commercial Code as in effect
from time to time (the "NYUCC") shall have the meanings given such terms
therein. The term "securities intermediary" when used herein but not capitalized
shall have the meaning given such term in the NYUCC as in effect from time to
time.
2. APPOINTMENT OF SECURITIES INTERMEDIARY. Securities Intermediary shall
maintain a collateral security account for the securities and other assets of
Borrower entitled "Special Custody Account for Custodial Trust Company as
Pledgee of Boulder Growth & Income Fund, Inc." (the "Pledge Account"), and
Securities Intermediary shall credit thereto and maintain therein all such
securities and other assets acceptable to it as it may receive for the Pledge
Account in accordance with Section 6(b) or Section 6(c) below; provided,
however, that Securities Intermediary shall neither accept for the Pledge
Account, nor credit to and maintain in the Pledge Account, any securities in
physical form, unless registered in the name of the Securities Intermediary or
its nominee..
3. ACCOUNT; REGISTRATION. (a) Securities Intermediary shall open the Pledge
Account no later than on such date as Lender may reasonably direct and
thereafter shall maintain the Pledge Account and act hereunder pursuant to the
terms of this Agreement. Securities Intermediary shall credit to and maintain in
the Pledge Account, subject to the provisions hereof, all cash, securities and
other property acceptable to it that it may from time to time receive for the
Pledge Account in accordance with Section 6(b) and Section 6(c) below.
(b) All cash, securities and other property in the Pledge Account shall (i)
be beneficially owned by Borrower, subject only to the lien and security
interest in favor of Lender created by Borrower under the Loan and Pledge
Agreement, and (ii) not be subject to any right, charge, security interest,
lien, set-off or claim of any kind in favor of Securities Intermediary or any
person (legal or natural) claiming through Securities Intermediary.
(c) The Pledge Account shall have credited to it only the securities and
other assets of Borrower.
(d) In maintaining the Pledge Account and otherwise acting pursuant to this
Agreement, Securities Intermediary is acting solely as a securities intermediary
as provided in this Agreement.
(e) The Pledge Account is an account to which Financial Assets are or may
be credited, and all securities and other assets credited to the Pledge Account
shall be deemed to be Financial Assets under Article 8 of the NYUCC. Securities
Intermediary shall indicate by book entry that such Financial Assets have been
credited to the Pledge Account.
(f) Any and all securities and other property credited to the Pledge
Account may be credited to a Securities Account that (i) maintained in the name
of Securities Intermediary or its nominee at (A) any sub-custodian employed by
Securities Intermediary pursuant to Section 4 below or (B) at any clearing
corporation (or agency) or book-entry system, inside or outside the United
States, which it is standard market practice to use for the comparison and
settlement of trades in such securities or other property, and (ii) is a
Securities Account to which are credited only assets held by Securities
Intermediary as a securities intermediary, custodian, fiduciary or otherwise for
customers.
(g) Securities Intermediary shall not change the name of the Pledge Account
without the prior consent in writing of Lender.
(h) Securities Intermediary is authorized to disclose Borrower's name,
address and securities positions in the Pledge Account to the issuers of such
securities when requested by them to do so.
4. AGENTS. Securities Intermediary may employ other banks and trust
companies as sub-custodians and may employ other suitable agents. The
appointment of any agent pursuant to this Section 4 shall not relieve Securities
Intermediary of any of its obligations or liabilities under this Agreement.
However, any book-entry system maintained by a Federal Reserve Bank, The
Depository Trust Company, Euroclear, Clearstream and any other clearing
corporation or agency, which it is or may become standard market practice to use
for the comparison and settlement of trades in securities or other property,
shall not be sub-custodians, agents or sub-contractors of Securities
Intermediary for purposes of this Section 4 or otherwise.
5. CONTROL; ENTITLEMENT ORDERS AND INSTRUCTIONS. (a) Without further
consent of Borrower or any other person (legal or natural), Securities
Intermediary shall act with respect to securities and other assets credited to
the Pledge Account only in accordance with written Entitlement Orders and other
written instructions of Lender. This Section 5(a) shall not be construed to
prevent Securities Intermediary from taking, until such time as it is otherwise
instructed by Lender, the actions provided for in Section 6(c) below or Section
7 below.
(b) All Entitlement Orders and other instructions hereunder shall be in
writing. Securities Intermediary may rely upon and act in accordance with any
such Entitlement Orders or other instructions which it reasonably believes to
have been given or signed on behalf of Lender by one of the persons designated
by Lender in Schedule A hereto as it may from time to time be revised upon
reasonable notice to Securities Intermediary.
(c) Unless otherwise specified herein, all Entitlement Orders and other
instructions of Lender to Securities Intermediary, and all other instructions,
demands, notices and other communications given with respect to this Agreement
or the Pledge Account by one of the parties hereto to one or both of the other
parties hereto shall be sent, delivered or given to the recipient at the
address, or the relevant telephone number, set forth after its name hereinbelow:
To Borrower:
BOULDER GROWTH & INCOME FUND, INC.
0000 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000 000-0000
To Lender:
CUSTODIAL TRUST COMPANY
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Vice President - Trust Operations
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Securities Intermediary:
INVESTORS BANK & TRUST COMPANY
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Client Management
Telephone: (000) 000-0000
or at such other address or telephone number as any party shall have provided to
the others by notice given in accordance with this Section 5(c).
6. DELIVERY AND RECEIPT OF SECURITIES; PAYMENT FOR SECURITIES; ETC. (a)
Securities Intermediary shall make deliveries of securities and other assets
from the Pledge Account (i) if to Borrower, only upon and in accordance with
instructions of Lender, and (ii) if to any other person (legal or natural),
including Lender, only upon and in accordance with instructions of Lender, and
only if, before making any such delivery, it has received a notice from Lender
certifying either (A) that an Event of Default with respect to Borrower has
occurred under the Loan and Pledge Agreement and is continuing or (B) if the
asset to be delivered from the Pledge Account is cash, that such cash is being
applied in accordance with the Loan and Pledge Agreement to repay loans
thereunder.
(c) Securities Intermediary shall receive for the Pledge Account, as and
when it becomes due and payable, any money or property (including payments of
principal, dividends and interest) due and payable on or on account of the
securities and other assets credited to the Pledge Account and, unless otherwise
instructed by Lender in a timely manner, shall promptly pay any such money over
to Borrower. All non-cash property that is so received by Securities
Intermediary for the Pledge Account shall be credited to and maintained in the
Pledge Account as provided in this Agreement.
7. PROXIES AND OTHER MATERIALS. (a) Unless otherwise instructed by Lender
in a timely manner, Securities Intermediary shall promptly deliver to Borrower,
to the extent required in the Custody Agreement, all notices of meeting, proxies
and proxy materials which it receives regarding securities held by it in the
Pledge Account.
(b) Unless otherwise instructed by Lender, Securities Intermediary shall
promptly deliver to Borrower, to the extent required in the Custody Agreement,
other documents and written information received by Securities Intermediary from
issuers of securities credited to the Pledge Account or from others regarding
such securities or other assets held in the Pledge Account.
8. RECORDS AND REPORTS. (a) Securities Intermediary shall keep accurate and
detailed accounts, in accordance with industry standards, of all receipts,
deliveries and other transactions in the Pledge Account, and all accounts, books
and records relating thereto shall be open to inspection and audit at all
reasonable times and upon reasonable prior notice by any person designated by
Borrower or Lender.
(b) For each business day that there are securities or other assets held in
the Pledge Account, or there is a transaction in the Pledge Account, a report of
all transactions in the Pledge Account on such business day (or if there were no
such transactions, then a statement to that effect) shall be delivered by
Securities Intermediary to Lender (at such e-mail address or in such other
manner as Lender may agree with Securities Intermediary from time to time in
writing) on the next succeeding business day.
(c) Securities Intermediary shall furnish to Borrower and Lender a monthly
statement of transactions in the Pledge Account and such other reports as shall
be reasonably requested by Lender or Borrower and are provided by Securities
Intermediary in the ordinary course of its business.
9. FEES AND TRANSACTION COSTS. Lender shall pay Securities Intermediary
such fees and charges for services rendered by Securities Intermediary under
this Agreement as Lender and Securities Intermediary shall from time to time
agree.
10. SUPER PRIORITY LIEN; ADVERSE CLAIMS. (a) In the event that Securities
Intermediary has, or subsequently obtains, by agreement, by operation of law or
otherwise a security interest in the Pledge Account or in any security or other
asset credited thereto, such security interest shall be subordinate to Lender's
security interest therein pursuant to the Loan and Pledge Agreement. The
securities and other assets held in the Pledge Account shall not be subject to
deduction, set-off, banker's lien or any other right in favor of Securities
Intermediary.
(b) If, to the knowledge of Securities Intermediary, any person (legal or
natural) asserts any lien, encumbrance or other adverse claim (including any
writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Pledge Account or any securities or other assets credited
thereto, Securities Intermediary shall promptly give notice thereof to Borrower
and Lender. Securities Intermediary shall have no obligation to conduct any
investigation or to take any other steps to obtain such knowledge.
(c) Upon Security Intermediary's request that it do so, Borrower shall
exercise such rights as it may then have under the Loan and Pledge Agreement to
obtain the release from the Pledge Account of securities and other assets
constituting excess collateral in the Pledge Account pursuant to the Loan and
Pledge Agreement.
11. TERMINATION. (a) This Agreement may be terminated at any time that
there are no loans outstanding under the Loan and Pledge Agreement by any of the
parties hereto upon seven days' written notice to each of the other parties
hereto. In the event of any such termination and in accordance with Lender's
instructions to do so (which instructions shall not be unreasonably withheld),
all property then in the Pledge Account shall be transferred to such custody
accounts of Borrower as Borrower shall have designated to Lender in writing.
(b) This Agreement may also be terminated by Securities Intermediary upon
termination of the Custody Agreement and one day's written notice to Lender and
Borrower, if, prior to the termination of the Custody Agreement, all property
then in the Pledge Account has been transferred to collateral accounts
established on terms and at another securities intermediary that Lender, in the
exercise of its sole discretion, has approved in writing.
12. REPRESENTATIONS AND WARRANTIES. (a) Each of Borrower, Lender and
Securities Intermediary represents and warrants, as to itself only, that (i) it
has all necessary power and authority to perform its obligations hereunder, (ii)
the execution and delivery by it of this Agreement, and the performance by it of
its obligations under this Agreement, have been duly authorized by all necessary
action, corporate or otherwise, and will not violate any law, regulation,
charter, by-law, or other instrument, restriction or provision applicable to it
or by which it is bound, and (iii) this Agreement constitutes its legal, valid
and binding obligation, enforceable against it in accordance with its terms,
subject, as to enforceability of remedies, to bankruptcy, insolvency and other
laws affecting creditors' rights generally and to general principles of equity.
(b) Securities Intermediary further represents and warrants that (i) the Pledge
Account has been established as set forth in Section 2 above and will be
maintained in the manner set forth herein until the termination of this
Agreement pursuant to Section 11 above, (ii) except for the Custody Agreement,
there are no other agreements entered into between Securities Intermediary and
Borrower with respect to the Pledge Account, (iii) it has not entered into, and
until the termination of this Agreement it will not enter into, any agreement
with any other person (legal or natural) relating to the Pledge Account and/or
any Financial Assets credited thereto pursuant to which it has agreed, or will
agree, to comply with Entitlement Orders or other instructions of such person
with respect to the Pledge Account or such Financial Assets, and (iv) it has not
entered into, and until the termination of this Agreement it will not enter
into, any agreement with Borrower purporting to limit or condition the
obligation of Securities Intermediary to comply with instructions of Lender,
including Entitlement Orders, as set forth in this Agreement.
13. STANDARD OF LIABILITY AND INDEMNITY. (a) Securities Intermediary shall
be liable to Lender only for any loss, damage, cost, expense (including
reasonable attorneys' fees and disbursements), liability or claim to the extent
arising from willful misfeasance, bad faith or negligence on the part of
Securities Intermediary. Securities Intermediary shall be liable to Borrower
only for any loss, damage, cost, expense (including reasonable attorneys' fees
and disbursements), liability or claim to the extent arising from willful
misfeasance, bad faith or gross negligence on the part of Securities
Intermediary. In no event shall Securities Intermediary be liable for special,
indirect or consequential damages, even if Securities Intermediary has been
advised of the possibility of such damages.
(b) Borrower shall indemnify and hold harmless Securities Intermediary and
any nominee of Securities Intermediary from and against any loss, damage, cost,
expense (including reasonable attorneys' fees and disbursements), liability or
claim arising directly or indirectly (i) from the fact that securities in the
Pledge Account are registered in the name of a nominee, or (ii) from the
provision of services under this Agreement, provided that Securities
Intermediary shall not be indemnified and held harmless from and against any
such loss, damage, cost, expense, liability or claim to the extent arising from
Securities Intermediary's willful misfeasance, bad faith or gross negligence.
14. RESPONSIBILITY OF SECURITIES INTERMEDIARY. Securities Intermediary
shall have no duties or obligations whatsoever except such duties and
obligations as are specifically set forth in this Agreement, and no covenant or
obligation shall be implied in this Agreement against Securities Intermediary.
In particular, but without limiting the generality of this Section 14,
Securities Intermediary shall have no responsibility to determine whether any
security interest created in favor of Lender under the Loan and Pledge Agreement
or otherwise is valid or enforceable or whether the value or type of the
property in the Pledge Account constitutes adequate security under the Loan and
Pledge Agreement or otherwise, or, if it does not constitute such adequate
security, to take any action other than pursuant to instructions of Lender given
in accordance with this Agreement, or to ensure compliance by Lender or Borrower
with the Loan and Pledge Agreement or any law or regulation regarding the
establishment or maintenance of margin credit, or to independently verify the
truthfulness of any notice given to Securities Intermediary by Lender or
Borrower under this Agreement.
15. CONFLICT WITH OTHER AGREEMENTS. In the event of any conflict or
inconsistency between this Agreement (or any portion thereof) and any other
agreement (whether now or hereafter existing) entered into between or among
Securities Intermediary and one or both of the other parties hereto, the terms
of this Agreement shall prevail.
16. GOVERNING LAW. This Agreement, the Pledge Account and the Security
Entitlements related thereto shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflict of
law principles thereof. Securities Intermediary's jurisdiction as securities
intermediary shall, for purposes of the NYUCC, be deemed to be the State of New
York.
17. NO WAIVER. No failure by any party hereto to exercise, and no delay by
such party in exercising, any right hereunder shall operate as a waiver thereof.
The exercise by any party hereto of any right hereunder shall not preclude the
exercise of any other right, and the remedies provided herein are cumulative and
not exclusive of any remedies provided at law or in equity.
18. AMENDMENTS. This Agreement cannot be changed orally, and, except as
otherwise provided herein with respect to Schedule A hereto, no amendment to
this Agreement shall be effective unless evidenced by an instrument in writing
executed by all the parties hereto.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts, each of which
shall be deemed an original but all of which together shall constitute but one
and the same instrument.
20. SEVERABILITY. If any provision of this Agreement is invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions shall not be affected or impaired
thereby.
21. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable by any
party hereto without the written consent of the other parties hereto (except
that Securities Intermediary may assign this Agreement without such consent to
any affiliate of Securities Intermediary to which it also assigns the Custody
Agreement). Any purported assignment in violation of this Section 21 shall be
void.
22. JURISDICTION. Any suit, action or proceeding with respect to this
Agreement may be brought in the Supreme Court of the State of New York, County
of New York, or in the United States District Court for the Southern District of
New York, and the parties hereto hereby submit to the non-exclusive jurisdiction
of such courts for the purpose of any such suit, action or proceeding, and
hereby expressly and irrevocably waive for such purpose any other preferential
jurisdiction by reason of their present or future domicile or otherwise. The
parties hereto hereby expressly and irrevocably waive the right to a jury trial
with respect to any matter relating to this Agreement.
23. HEADINGS. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or construction
of any provision of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its representative thereunto duly
authorized, as of the day and year first above written.
BOULDER GROWTH & INCOME FUND, INC.
By /s/ Xxxx Xxxxx
Name: Xxxx Xxxxx
Title: VP and Treasurer
CUSTODIAL TRUST COMPANY
By: /s/ Xxx Xxxxxxxxxxx
Name: Xxx Xxxxxxxxxxx
Title: President
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
SCHEDULE A
Signatures of Authorized Persons
Set forth below are the names and specimen signatures of the persons
authorized by CUSTODIAL TRUST COMPANY to give written instructions to Securities
Intermediary.
NAME SIGNATURE
Xxx Xxxxxxxxxxx /s/ Xxx Xxxxxxxxxxx
Xxxxx Xxxxxxx /s/ Xxxxx Xxxxxxx
